Logistics Management (Bulent Sezen)

LOGISTICS MANAGEMENTLOGISTICS MANAGEMENT

Doç. Dr. Bülent SEZEN

What is Logistics?What is Logistics?

Logistics is the . . . “process of planning, implementing, and controlling the efficient, effective flow and storage of goods, services, and related information from point of origin to point of consumption for the purpose of conforming to customer requirements.“

Council of Logistics Management

Is it different from SCM?Is it different from SCM?

Not really!

“Supply Chain Management deals with the management of materials, information, and financial flows in a network consisting of suppliers, manufacturers, distributors, and customers.” (Stanford Supply Chain Forum)

So, Logistics and Supply Chain are equivalent terms.

Logistics Functions

Purchasing / Procurement

Inventory Control

Warehousing

Materials Handling

Facility Location / Network Design

Transportation

Customer Service

Order Processing

A List of Approaches in Log. Man.A List of Approaches in Log. Man.

Just in Time Inventory Vendor Managed Inventory Quick Response Collaborative Planning,

Forecasting, and Replenishment

Outsourcing / 3PLs Cross-docking / Flow

Through Centers

Build to Order SC Visibility Software Internet / EDI Collaborative

Transportation Management

Auctions / Exchanges Merge - In - Transit Partnerships / Alliances

Logistics firms in TurkeyLogistics firms in Turkey

A Sample Logistics Firm: EKOLA Sample Logistics Firm: EKOL

Value Added Services Value Added Services

Value added services, such as quality control, labeling, sorting, repacking, etc. can be included in the logistics processes.

Video: EKOL LojistikVideo: EKOL Lojistik

Video: Borusan Logistics (VLC Player)Video: Borusan Logistics (VLC Player)

Bonded WarehouseBonded Warehouse((In Turkish: “In Turkish: “AntrepoAntrepo””))

Bonded warehouse is a warehouse in which goods are stored without customs duties being paid until they are removed from the warehouse.

Such warehouses are used for the storage of import merchandise, subject to duty, until the duties are paid or the goods reshipped without entry.

In accordance with the limitations and authorities defined by laws of customs, bonded warehouse stores merchandise, not subject to free circulation, under internationally acclaimed standards prior to nationalization.

Operations in the warehouse may include assembly, manipulation or storage but usually not manufacturing.

Bonded WarehouseBonded Warehouse……

Cross DockingCross Docking

a logistics activity that attempts to reduce costs and total lead time.

breaks down received items on the loading dock and immediately matches them with outgoing shipment requirements, instead of stocking the items in warehouse locations and returning to pick for orders at a later time.

Cross DockingCross Docking……

eliminates the need to place inventory in storage.

This can mean moving pallets across the docking areas (hence the name) for loading onto delivery vehicles.


Crossdocking essentially eliminates the inventory-holding function of a warehouse while still allowing it to serve its consolidation and shipping functions.

The idea is to transfer incoming shipments directly to outgoing trailers without storing them in between.


In a traditional warehouse, goods are received from vendors and stored in devices like pallet racks or shelving.

When a customer (e.g., the consumer or perhaps a retail outlet) requests an item, workers pick it from the shelves and send it to the destination.


In a crossdock, goods arriving from the vendor already have a customer assigned, so workers need only move the shipment from the inbound trailer to an outbound trailer bound for the appropriate destination.

The already part should make you think of information system requirements--a chief obstacle to implementing crossdocking successfully.

Cross Docking…(classification)Cross Docking…(classification)

One way to classify crossdocking operations is according to when the customer is assigned to an individual pallet or product.

In pre-distribution crossdocking, the customer is assigned before the shipment leaves the vendor, so it arrives to the crossdock bagged and tagged for transfer.

In post-distribution crossdocking, the crossdock itself allocates material to its stores.

Cross Docking…(classification)Cross Docking…(classification)

Pre-distribution is definitely more difficult to implement because the vendors of the crossdock must know which customers of the crossdock need what before they send the shipment.

This involves quite a bit of information transfer, system integration, and coordination.

For a distributor with hundreds of vendors, the problem is big, big, big!

Logistics Experience will be Logistics Experience will be different from one sector to anotherdifferent from one sector to anotherTextiles

– speed and variety due to seasonality concernsRetailing (FMCG)

– prevents stores from having empty shelves or shelves with overstocks

– Frozen storage and transportationHealth

– hygienic, have limited shelf life, require special storage conditions and entertain high inventory risks

Automotive – just in time (JIT), delivering parts from thousands of

kilometers, special packagingFuel and Petroleum Transportation

– very special tanker security systems

Fuel and Petroleum Fuel and Petroleum TransportationTransportation Fuel tankers have bodies, including the

chassis, made of aluminum alloy and are the lightest tankers in weight and highest in volume (20.000 to 38.000 liters).

The tanks have a bottom loading and unloading system and all the necessary security equipments for overloading.

Fuel and Petroleum Fuel and Petroleum TransportationTransportation…… The tanks have capacities between 20.000 and

38.000 liters, 4 to 7 compartments and 3.200 to 7.000 liters of compartment capacities.

Along with these tankers there are three-level security systems, bottom loading equipments, anti-rolling system, a security system locking the brakes when the API drum is opened and the valves when it is closed, emergency buttons at three sides and an EBS brake system.

Fuel and Petroleum Fuel and Petroleum TransportationTransportation……

There are also:

Emergency power switch,

Emergency valve locking switch,

6 rear-view mirrors

Fuel and Petroleum Fuel and Petroleum TransportationTransportation……

The drivers clothes have long sleeves and long trousers.

The fabric is 100% cotton to avoid static electricity.

In addition, all drivers wear anti-static shoes.

The drivers’ equipments also include gloves resistant to the material they carry, a helmet compliant to EN norms and glasses against the material vapor.

Video: Shell Oil Tanker DistributionVideo: Shell Oil Tanker Distribution

Vehicle LogisticsVehicle Logistics

Vehicle logistics services include:

– Vehicle Transportation

– Marine Transportation (RO-RO)

– Ship Loading and Unloading

– Storage and Parking Lot Services

– Dealer Distributions

– Information Systems and Reporting

Vehicle LogisticsVehicle Logistics … …

Special transportation services are:

Inter-dealer transportation,

Fair exhibitions,

Sports competitions,

Collection vehicles


During the placement of vehicles on to the ship;

Minimum parking distances,

Installation of the safety equipment

should be realized.


Storage and Parking Lot Services:

- Transfer to addressed area,

- Transfer to the dispatch area,

- Transfer of the out of order vehicles to the service area,

- Transfer from the service area to the addressed area

Video: Interview with People at Video: Interview with People at Omsan Vehicle Logistics Dept.Omsan Vehicle Logistics Dept.

Video: Şahsuvaroğlu Tractor Video: Şahsuvaroğlu Tractor ShipmentShipment

Case Studies with EKOL: Case Studies with EKOL: Intra MedikalIntra Medikal

Intra Medikal used to perform inventory, warehouse and distribution management internally before Ekol partnership.

After a comprehensive project, logistics processes are outsourced to Ekol.

The first value obtained by this project was eliminating the short distance transportation costs of bonded goods from customs area to warehouse.

Case Studies with EKOL: Case Studies with EKOL: Intra MedikalIntra Medikal……

The inventory records database enables a systematical display of shelf lives and other product specific information.

Before export and internal distribution, products are barcode labeled according to the accepting criteria of customers and hospitals.

Customers in Istanbul receive daily deliveries, while customers out of Istanbul receive cargo shipments.

Case Studies with EKOL: Case Studies with EKOL: Çarşı (Boyner)Çarşı (Boyner)

Carsı, one of Turkey's leading retailer chain stores, has become a pioneer in the field of logistics outsourcing.

On its quest for a logistics partner, Carsı looked out for many candidates and finally preferred Ekol.

By consolidating Carsı store supply strategies according to the product groups as "cross-dock", "flow thru" and "replenishment" strategies, EKOL achieved inventory minimization and delivery efficiency.

Case Studies with EKOL: Case Studies with EKOL: Çarşı (Boyner)…Çarşı (Boyner)…

Interfaces have been built between EKOL and Carsı softwares which have different infrastructures running independently and a data processing structure has been established enabling both parties to monitor all processes, create work orders and report the results simultaneously.

Thanks to this system, any data Carsı keys in to the software can be utilized for generating work orders to EKOL.

Case Studies with EKOL: Case Studies with EKOL: BraunBraun

Operating within Gillette group, Braun is the world's largest electric shaving machines, small kitchen appliances and blood pressure and fever measurement devices provider.

Braun was working with a company for supplying spare parts, after sales support and product change under insurance coverage.

Spare parts purchased by service supplier from Braun's center in Germany were later transported by freight forwarder companies.

Case Studies with EKOL: Case Studies with EKOL: Braun…Braun…

After being cleared of customs by customs broker firms they were sent to Braun technical services via cargo companies.

There was hardly any integration achieved on these steps, and no advantage of automation technologies for computer and product flow.

Transportation, customs handling, stock and order management is taken over by Ekol providing roofconsolidation.

Case Studies with EKOL: Case Studies with EKOL: Braun…Braun…

Taking 3rd Party Logistic service provider concept one step further, EKOL imports Braun products and takes the burden of all inventory and financial costs and risks.

In this context, EKOL proved that Third Party Logistic service suppliers can be relied on, in maintaining minimum inventory levels, financing inventory keeping costs, assuming stock risks, and making direct sales decisions.

What is Ro-RoWhat is Ro-Ro??

Roll-on/roll-off (RORO) ships are designed to carry wheeled cargo such as automobiles, trailers or railway carriages.

This is in contrast to lo-lo (lift on-lift off) vessels which use a crane to load and unload cargo.

What is Ro-RoWhat is Ro-Ro??

RORO vessels have built-in ramps which allow the cargo to be efficiently "rolled on" and "rolled off" the vessel when in port.

While smaller ferries that operate across rivers and other short distances still often have built-in ramps, the term RORO is generally reserved for larger ocean-going vessels.

What is Intermodal (Combined) What is Intermodal (Combined) Transport?Transport?

It is a transport method that more than one transport mode is used for the same transport container.

The process can also be defined as a transportation method where transport mode changes for the same transport container or land vehicle, but the goods themselves are not handled during these changes.

What is Intermodal (Combined) What is Intermodal (Combined) Transport?Transport?

In other words, it is a transport method that integrates advantages of different transport modes.

In intermodal transport, the aim is to achieve an effective combination of cost, delivery time and service quality.

Features of Intermodal TransportFeatures of Intermodal Transport

Using standard transport units (like standard containers, trailers or pallet).

The suitability of the transport units for loading, carriage and unloading.

The compatibility of the technological, legal and organizational parts of the process chain within the transport system.

The goods inside the transportation container are not handled

Advantages of Land-Railway Advantages of Land-Railway Intermodal TransportIntermodal TransportGuarentee of long-term fixed price

Secure shipping

Minimum interference by weather conditions and traffic constraints

Easier border crossing

Cost and equipment supply advantage in high volume and planned shippings

Omsan Lojistik’s Intermodal Omsan Lojistik’s Intermodal TransportTransport

Omsan Lojistik’s Intermodal Omsan Lojistik’s Intermodal TransportTransport ( (cont’dcont’d))

What is Milk Run Distribution?What is Milk Run Distribution?

It is the combination of shipments from multiple vendors in close geographic proximity into one shipment received by the customer,

normally done for a defined route on a recurring basis.

What is Milk Run Distribution?What is Milk Run Distribution?......

Milk Run DistributionMilk Run Distribution……

What is a Freight Forwarder?What is a Freight Forwarder?

An independent business that handles export/import shipments for a fee.

A freight forwarder is among the best sources of information and assistance on export regulations and documentation, shipping methods, and foreign import regulations.

Forwarder assembles, collects and consolidates less-than-truckload (LTL) freight .

What is a Freight Forwarder?What is a Freight Forwarder?......

Forwarder consolidates freight for many shippers, arranges for shipment and delivery via LTL carriers and gets lower (freight) rates based on volume than the individual shippers could obtain.

At the request of the shipper, the forwarder makes the actual arrangements and provides the necessary services for expediting the shipment to its overseas destination.

It also clears the freight through customs.

What is a Freight Forwarder?What is a Freight Forwarder?......

The freight forwarder does not actually carry the cargo or conduct business for the ship.

It is an intermediary between carrier and owner of goods being transported.

The forwarding agent assists the exporter in finding the most economic and efficient methods of transporting and storing cargo.

E-marketplace, Online Auctions and E-marketplace, Online Auctions and ExchangesExchanges

An E-marketplace is a virtual online market where organizations register as buyers or sellers to conduct B2B e-commerce over Internet.

They can be operated by an independent party, or be run by some form of industry consortium that has been set-up to serve a particular sector.

An Online Marketplace: An Online Marketplace: Equipnet.comEquipnet.com

Online AuctionsOnline Auctions

Online auctions are computerized versions of traditional auctions where prices are set by buyers bidding against each other.

Online auctions use Internet technology, so, vast numbers of businesses can bid.

Online ExchangesOnline Exchanges

Online Exchanges are websites where buyers and sellers trade goods and services online.

There are successful exchanges in markets as diverse as energy, textiles and logistics.

Online ExchangesOnline Exchanges……

Types of exchanges:

– Request for quotation• An invitation to suppliers to provide a quote for a

specific product or service

– Request for bid• An invitation to buyers to bid for a specific product

or service that you are able to provide

Logistics Management (Bulent Sezen)

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